High Factory Prices Aren’t Inflationary

Many pundits were spinning the inflationary story when factory prices continued higher in March, and they were quick to point out how rising factory prices will trickle down to consumer prices in the months to come. High factory prices must certainly mean high consumer prices, yet the data does not show a lagging increase in … Read more

Break the Fed

In what can be best described as a classic western showdown, on one side is the Federal Reserve which is tasked with managing the monetary system, and on the other side are market participants who want to keep the good times rolling. Both gunslingers came prepared, as the Fed is eager to show they can … Read more

Rates Can Only Go Up

These are words I have heard my entire adult life. Every time rates drop, a lending professional always encourages me to take out the biggest loans I can, as rates will assuredly never be this low again. For the past forty years, rates continue to fall despite the opinion of many experts that rates can … Read more

The Fed’s Policy Mistake

Eight times a year the Federal Open Market Committee meets to review economic and financial conditions to determine the appropriate positions for monetary policy to maintain full employment and price stability. At its recent March 2022 meeting, the FOMC voted to raise the Federal Funds Rate to reduce aggregate demand in hopes to squelch rapidly … Read more

There’s a Dollar Shortage

Last week the Federal Open Market Committee announced they were embarking on the first tightening cycle since December 2015 when the Fed began raising the Federal Funds Rate before lowering rates again in the summer of 2019. Fed Chair Powell reiterated during his press conference that the Fed was prepared to hike rates and was … Read more

Stagflation is Coming

With consumer prices soaring to levels not seen since the early 1980s, many pundits are predicting the economy will enter a period of stagflation that could persist for years. Stagflation is any period marked by both rising inflation and rising unemployment, something our economy has not experienced since 1980. Despite the infrequency of periods of … Read more

Crude Will Soon Crash

Crude oil prices continue to scream higher and have recently touched their highest level since Great Financial Crisis. Many pundits are predicting crude oil prices will continue to climb and could easily break the peak set back in July 2008. With the world turning its back on Russian oil and inventories at Cushing Oklahoma fast … Read more

The Fed is Trapped

While the world is focused on the situation between Russia and Ukraine, the global economy is already rapidly slowing down. Further uncertainty due to geopolitics and war could easily tip the global economy into a recession. For the Fed, the Russia and Ukraine conflict could not come at a worse time as it is about … Read more

Yields Will Soon Collapse

The Federal Reserve is on the cusp of making its biggest policy mistake in modern times and it is seemingly unaware of the damage it is about to cause. Despite appearances of a robust labor market, rising corporate profits, and high asset prices, the underlying economy is rather weak. For many Americans, high inflation is … Read more

The End of QE

After 29 months of operation, the Fed will end its large-scale asset purchase program, or Quantitative Easing, on March 11, 2022. While many believe the end of QE is long overdue as it stoked the inflationary fire, others suddenly find themselves facing uncertainty. Bond investors are becoming increasingly nervous as they fear interest rates will … Read more